Novo Holdings makes minority investment in NREP
Nordic real estate investor NREP has secured a minority investment from Novo Holdings.
NREP, which is controlled by its senior partners, will now be able to invest more into its own funds while accelerating ventures into technology, sustainability and understanding customers.
NREP has developed a series of innovative real estate products within co-living, student housing, care homes and modern logistics. Novo Holdings becomes a non-controlling minority shareholder by injecting capital into NREP, to accelerate the company’s further development of customer-centric, sustainable real estate concepts and support NREP’s ambition to improve the built environment and pioneer the industry.
”Novo Holdings is well-reputed and one of the world’s largest privately-held, independent investors, with a truly long-term investment horizon. Like us, they believe that the best businesses are those that solve problems, and their desire to make a positive contribution to society has been decisive for us, now that we welcome an external, minority shareholder to our family. With their backing, we will accelerate our vision to make real estate better and become a world-class investor, benefitting all our stakeholders,” says Mikkel Bülow-Lehnsby, partner and co-founder of NREP.
Novo Holdings made its first investment into one of NREP’s real estate funds in 2018. The solid business model and a track-record with consistent top-quartile returns, combined with the innovative approach to real estate, are behind the decision to invest in NREP as a company as well.
”We have worked closely with NREP and we are convinced of the long-term sustainability of the company's concepts, financially as well as socially and environmentally. We also expect to be able to contribute our financial expertise and international networks to support NREP in the next stage of the growth journey. Real estate risks facing some challenging years, but it is under such conditions that NREP's innovative business concepts, combining financial performance, customer focus and sustainability, will be able to stand out and exploit the opportunities that will arise,” says Morten Beck Jørgensen, Managing Partner for Financial Investments at Novo Holdings, who now joins NREP’s Board of Directors.
Claus Mathisen, NREP’s CEO, shares current macro-economic concerns, yet he remains confident when looking further ahead.
”We see real estate as the largest product category in the world, with a vast potential across the value-chain, also in the current situation. We deliver value by creating more customer-centric products, and we aspire to make real estate greener, healthier and more digital. With Novo Holdings’ support, we can now accelerate our investments into capabilities and organisation to deliver on our long-term ambitions,” says Claus Mathisen, partner and CEO.
Besides adding capital to NREP’s balance sheet, Novo Holdings will also increase its commitment to future NREP real estate funds, starting with the new Nordic Strategies Fund IV, which NREP is currently raising and where Novo Holdings is investing EUR125 millio. With the company investment, Novo Holdings becomes a 25 per cent minority shareholder in NREP, which remains majority owned by its senior partners. There will be no change to NREP’s day-to-day management or Investment Committee.
Across funds, NREP has a total footprint above 2.5m square meters, primarily within the three strategic focus segments; residential, logistics and care. Assets under management are close to EUR5 billion, and the company has pioneered several sustainability solutions – including the world’s first 100 per cent recycled concrete building and the development of ‘UN17 Village’ in Copenhagen, the world’s first large-scale building to align to all of UN’s 17 Sustainable Development Goals. NREP has committed to a 100 per cent transition to green electricity supply in all buildings by 2025, and energy projects include the largest ever rooftop solar panel system in the Nordics, just outside Gothenburg, as well as the world’s first ultra-deep geothermal well in Finland.